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Average new car transaction price hits new high in December


Rising product prices and higher lending rates have resulted in higherecord high deal price for new car in December, with the average cost in the US rising to a record $49,507, according to data from Kelley Blue Book released today.

The report notes that ATP – the average transaction price – has risen above the suggested retail price – MSRP – for more than a year. Sales volume rose more than 5% year-on-year in December, a situation Kelley attributed to improved supply. Total revenue in 2022however, was down 8% year-on-year.

“The trading data from December clearly shows that overall prices show no signs of slowing as we head into the year-end,” said Rebecca Rydzewski, director of economic and industry insights at Cox Automotive. “Luxury prices fell slightly in December, but non-luxury transaction prices rose. Truck sales were particularly strong last month, and with many vans sold for over $60,000, a new record was all but inevitable.

Industry analysts claim clearest headwinds in new car market created by higher interest rates, forced to raise interest rates by the Federal Reserve to tame inflation, and in general limited inventory. Recently report from JD Power shows that the average monthly payment for a new car December loan was $718, up $47 from a year ago. But 16% of consumers in December borrowed money with monthly payments over $1,000.

Consumers think that means, and tram especially way too expensive. Fortunately, manufacturers’ incentives, which have largely disappeared over the past two years, are making a comeback, particularly in the electric and luxury car markets, Kelley’s data shows. Additionally, “With new tax credits coming soon, electric vehicle ATP will be lower for eligible vehicles,” Rydzewski said.

Non-luxury brands, such as Honda and Kiashowed particularly strong performance in December, with an average price paid of $45,578 — a record high and up $994 from the previous month.

Meanwhile, the average luxury shopper paid $66,660 for a new car last month. Mercedes-Benz and Landrover shows top price strength in the luxury market, trading between 2.6% and 6.5% off list prices. But premium brands audio, BMW car, Infiniti, Lexus, Lincolnand Volvo shows lowest price strength with some discount in effect, sell 1% or more below MSRP in December, according to the survey.



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